Former Coe Manufacturing site poised to be productive again (with video)

By John Arthur Hutchison

Saturday, December 1, 2012

For nearly a decade, local officials have worked to find a way to fully utilize the 25-acre former Coe Manufacturing site that lies vacant on Bank Street in Painesville.

That prospect nears fruition and if all goes well, local manufacturing businesses could soon move in to the site as way to help expand their operations and potentially create new jobs.

Painesville had been seeking resources for remediation and clean-up of industrial pollutants at the former Coe site since 2003. Four years ago, the city and Lake County Port Authority began a partnership on that front.

The facility had been a staple in the city for generations after Harold Hayes Coe and Leonard Anderson joined forces in 1852 to form The Anderson and Coe Company.

They first manufactured steam engines and machinery for sawmills and grist mills and the company they founded grew for 146 years to the highly diversified, internationally known enterprise that was Coe Manufacturing Company.

In 2009, the company was acquired by a competitor and the operations ceased in Ohio.

The scope of the remediation project that Painesville and the Port Authority had worked on changed dramatically at that point, said Port Authority Executive Director John Loftus, who retired Friday.

"Coe was still operating and we were only looking at a small site about 5 acres where the contamination was," Loftus said.

The property was eventually acquired by USNR Facilities, which donated it to the Port Authority in November.

"As a result of the economic downturn and Coe went out of business, USNR picked up the property at a foreclosure proceeding and completely shut it down in 2009," Loftus said.

In 2010, the last of the equipment was moved out and items auctioned, he said.

"Then in 2011 and now 2012, we were working with USNR, working with the state to get the money to do the assessment and working with USNR on a potential donation agreement," Loftus said.

"It just takes a long time to bring all those things together."

Loftus said federal environmental rules would have considered USNR a responsible party if there was ever a lawsuit brought against the property.

But the effort to find a way to clean up and redevelop the site took a giant leap forward in May when the state of Ohio approved a $1.2 million grant to the Port Authority that will be paired up with a $500,000 Ohio Water Development Authority loan and matching funds.

The money will be used to environmentally assess, clean up, and improve the site, according to the Ohio Department of Development.

"As a potential responsible party (USNR) doesn't qualify for brownfield funds. That's where we become an attractive party," Loftus said. "We're a government agency, so the company can donate the property to us and get a tax deduction.

"We are able to seek brownfield cleanup funds and the state has accommodated us on that. There's really a benefit all the way around."

The Port Authority is in the process of completing a two-phase study to determine the amount of cleanup that is necessary and the timetable for the property, said Board Chairman Harry Allen.

"We want to bring the site to life and obviously use some resources that are there," Allen said. "We have to obviously make sure we can mitigate it."

Ideally, the Port Authority would like to see the property turn into an business park with opportunities for companies to purchase space, Allen said.

Right now, there is 200,000 square feet available and the environmental study will determine if all the site can be converted to use, he said.

"It's our hope that it can be used by industry or whatever on a going forward basis," Allen said.

"That's a real win for the county and it's a win for the Port Authority."

Potential clients

Loftus said there are three companies that so far have expressed an interest in the former Coe site and that could potentially mean 200 jobs locating on the property, although not all of them may be new.

North Perry Village-based South Shore Controls Inc. is highly interested to have potential operations at the site, said its company president, Rick Stark.

South Shore Controls and 36 company employees currently build industrial and industrial control systems.

A new processor reactor that converts polymer waste to fuel is set to arrive Monday at the North Perry Village facility.

It was a project supported by Ohio's Third Frontier program, Stark said.

"Assuming it works, we'd be able to make a lot of these," he said.

"It's a very exciting project and will allow us to increase our work staff."

Stark said the former Coe site could help his company that currently is located in a 12,000-square-foot facility potentially move into an area of 30,000 square feet.

"The space, it's really a great size," he said. "Put us in the very, very, very interested category."

Another potentially interested business is Hanover Marine based in Fairport Harbor.

Owner Steve Malbasa said his company builds sailboats that range in size from as small as 26 feet to as large as 53 feet.

The vessels are typically custom made and require workers who have an artisan touch.

"It requires unique space, when turning sideways or the tooling for a 53-foot sailboat, you need high ceilings and broad open spaces and it requires a lot of space," Malbasa said. "The Coe building, the whole property is a unique set up for what we do."

What's next

Lease-to-purchase agreements are in the works as the Port Authority continues environmental testing and cleanup, Loftus said.

"Ultimately, our goal is to get what is known as a covenant not to sue by the state of Ohio," he said. "That's the legal protection that the state isn't coming after them for past environmental problems.

"So after that covenant not to sue that really would be the trigger date if a company wants to buy the buildings."

Interested companies would then know they would have environmental protection and they would be able to concentrate on production and not have to worry about past activities at the site, Loftus said.

The time frame to secure a covenant not to sue is typically between 18 months to two years, he said.

Loftus said the exciting part is that a 25-acre site that has not been utilized for the past two years will be productive again and that means property, income, and sales tax back to the community.

The Port Authority would also receive revenue generated by lease payments and have the ability to obtain government funding to help pay if the costs for environmental cleanup exceed existing grant and loan funding, Loftus said.